Suncor Energy Swings to Profit in Q2

Suncor Energy (SU) swung from a loss to a profit in the second quarter thanks to improved oil prices. The Calgary-based integrated energy company specializes in the production of synthetic crude from oil sands.

Funds from operations increased from C$488 million to C$2.362 billion in the quarter ended June 30.

Meanwhile, net earnings amounted to C$868 million (C$0.58 per share) in Q2 2021, up from a loss of C$614 million (C$0.40 per share) in Q2 2020.

Operating earnings came in at C$722 million (C$0.48 per share), compared with a loss of C$1.35 billion (C$0.88 per share) a year ago, missing estimates by C$0.01.

Total upstream production reached 699,700 barrels of oil equivalent per day (boe/d) in the second quarter, up from 655,500 boe/d a year earlier.

Suncor’s President and CEO Mark Little said, “Suncor generated $2.4 billion in funds from operations in the quarter while also completing significant turnaround activities in the upstream and downstream businesses. The improved cash generation enabled us to increase shareholder returns to approximately $1.0 billion, representing approximately 40% of our funds from operations and we’re targeting further debt reduction in the latter half of the year in line with our previously announced capital allocation strategy.” (See Suncor Energy stock charts on TipRanks)

Three days ago, JPMorgan analyst Phil Gresh maintained a Hold rating on SU while lowering its price target to C$32.00 (from C$34.00). This implies 27% upside potential.

Overall, consensus among Wall Street analysts is that SU is a Strong Buy based on 11 Buys and 3 Holds. The average Suncor Energy price target of C$37.52 implies 49.5% upside potential to current levels.

TipRanks’ Smart Score

Suncor Energy scores a “Perfect 10” on the TipRanks Smart Score rating system, indicating that the stock has strong potential to outperform the overall market.